A new year means we are able to help more clients get out of tax trouble and start over! This month we were able to help several clients including a client whose employer went out of business and left him in tax trouble and a client who faced medical problems while trying to take care of his tax debt. Here’s how we were able to help them!
Case #1: A tax debt might seem small at first, but if you start adding penalties and interest, that small tax debt can grow and become a larger amount than you planned on. Our clients saw this happen firsthand. When they came to our office, our clients owed over $150,000 and that amount was growing. They had filed all their tax returns but didn’t have the money to pay the taxes they owed. We were working on getting all our client’s financial information together to negotiate a payment plan when our client suffered a heart attack and then was fired from his job. This changed things drastically for our clients. Because he was the main provider and now had no income, our clients couldn’t afford to make payments and the IRS placed tax liens on their property. Using their new financial information, we filed an Offer in Compromise to hopefully end their tax troubles once and for all. After months of waiting, we were assigned an agent who didn’t want to accept our offer. We provided documentation and fought to have our client’s medical expenses included in the IRS’s assessment of what our client could afford. They finally agreed on an offer amount for our clients and accepted the offer, saving our clients over $363,000!
Case #2: Switching from a W2 employee to a 1099 contractor can have a big effect on how you do your taxes. For instance, one of our client’s employers went under and paid him as a 1099 employee for the final year, despite being paid as a W2 employee in prior years. Our client did not know he should be withholding money to pay the necessary taxes that weren’t being taken out of his paycheck. On top of that, our client started receiving oil royalties. When it came time to file, our client’s CPA told them how much they were going to owe and it was more than they could afford. We were able to start helping our client resolve his tax issue by filing his missing tax returns. The IRS wouldn’t put him into a resolution unless he was fully compliant. While we were filing his returns, our client was let go from his job. We asked the company for a letter stating he no was no longer employed and took it to the IRS. Using the letter and updated financials, we were able to place our client into a $25/mo Partial Payment Installment Agreement, saving him $171,000!